InvestorQ : What is your market view for 03 Feb since the Nifty and Sensex have rallied so sharply since the budget?
indhumathi Sayani made post

What is your market view for 03 Feb since the Nifty and Sensex have rallied so sharply since the budget?

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diksha shah answered.
4 months ago
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You can almost sense that markets sentiments have shifted diametrically in last 2 days since the budget was announced. The Sensex has gained 3500 points in 2 days and is back to the 50,000 levels. In fact, for most part of Tuesday, Sensex was above 50,000 before settling lower. This time around, momentum appears to be very strong for markets.

The high beta sectors continued to do well on the Nifty and Sensex. It was another day of strong returns for banks, autos and cement as these sectors celebrated the combination of a bad bank and a much bigger infrastructure push. The liberal fiscal deficit target will also support consumption boom for the next few years.

Foreign portfolio investors were almost back with a bang and were net buyers to the tune of Rs.6,182 crore on Tuesday 02 Feb while DFIs sold Rs.2,035 crore on Tuesday. One caveat here is that a lot of this buying was driven by a slew of FPIs infusing fresh money into the newly listed Indigo Paints. We may have to await a confirmation of representative flows.

Global markets are back in the midst of a frenetic rally. The rally in the US markets continued with both NASDAQ and Dow gaining over 1.6% on Tuesday 02 February. Bond yields above 1% brought the focus back on old economy stocks globally. European markets also gained over 150 bps across the board. SGX Nifty trades 40bps higher in early trades.

From a strategy perspective, you will have to give it to the bulls for now, unless there is some kind of a cataclysmic event that disrupts the global markets. That does not appear too likely at this point of time. Look to buy stocks and stories that are in sync with themes like long term investments, infrastructure, banking etc from a medium term perspective.

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